India likely to import 14.37 mt veg oil in 2022-23: IVPA chief

India is likely to import around 14.37 million tonne (mt) of vegetable oil during the current oil year (October 2022-September 23) against 14.07 mt in 2021-22, according to Sudhakar Desai, President of the Indian Vegetable Oil Producers’ Association (IVPA).

Presenting a paper on “Indian palm oil outlook and its impact on prices” at UOB Kay Hian Palm Oil Outlook Seminar in Malaysia on Monday, he said palm oil import could be in the range of 9.3 mt in 2022-23 against 7.99 mt in 2021-22. He estimated the import of soyabean oil at 3.01 mt during 2022-23 (4.05 mt in 2021-22) and sunflower oil at 2.01 mt (1.93 mt).

He said sunflower oil import will be good in the short-term due to TRQ (tariff rate quota) ending with effect from April 2023.

With consumption bouncing back in India by about 5 per cent due to fall in prices, he said, there has been an increase in imports.

He further said that domestic production of vegetable oils will go up to 9.68 mt in 2022-23 against 9.06 mt in 2021-22 due to an increase in the production of soyabean and mustard crops.

Mustard and soyabean crops have gone up 57 per cent and 31 per cent, respectively, in the last three years.

At 11 mt, mustard seed crop is higher by 1 mt and has a carry-out stock of 1 mt. Oilmeal exports from India is 70 per cent higher at 3.2 mt, driven by rapeseed extraction, he said.

Desai estimated that the palm oil production in Malaysia is at 18.95 mt during 2023 (January-December) against 18.45 mt in 2022, an increase of around 2.7 per cent. Indonesia’s palm oil production is estimated at 49.78 mt in 2023 against 48.30 mt in 2022, a growth of 3 per cent.

He said the combined carry-out stocks of Indonesia and Malaysia are expected to be lower by about 2.3 mt by June compared to the stock burden of last year post-Indonesia ban. He expected the combined carry-out stocks to be at 7.56 mt in June 2023 against 9.97 mt in June 2022.

For this, he assumed the palm oil’s usage in biofuel production by Indonesia at around 10.8 mt in 2023 against 9.65 mt in 2022.

On the price outlook, he said the palm oil prices are expected to be in the range of MYR (Malaysian ringgit) 4,200-4,700 for April-June 2023 and MYR 4,300-4,500 for July-September 2023. For October-December 2023, he said it is expected to be in the same range as July-September 2023 looking at the stock evolution in the origin.

He said weather forecast, policies of the Indonesian and Indian governments, Chinese demand and Ukraine situation are the key factors to watch. These factors will have a major impact on prices along with the crucial factors such as macro economic fears and geo-political issues, he said.

Industries in India have been recommending for the increase in the duty differential of crude and refined oil to restrict the high volume of refined palm oil. He said the government might have to take some steps if prices of rapeseed fall below the MSP (minimum support price) levels. This can be done either by government procurement or by general increase in import duties, he added.

In such a situation, restrictions on refined oils is a better choice to pre-empt cheaper influx of refined oil at zero duty from countries such as Nepal, Bangladesh, etc. Such imports are causing further problems to the Indian domestic manufacturing, he added.

Tags: soyabean oil, consumption, sunflower oil, tariff rate quota, импорт, Indonesia, prices, Vegetable Oil, Production, India, Malaysia, palm oil